Last year we reported on S.B. No. 72, introduced by State Senator Matt Huffman (R), which would modify Ohio law to limit the scope of prevailing wage requirements in Ohio. After being referred to the Finance Committee in March 2017, word about S.B. 72 was mum until this week, when the committee held its first hearing on the bill. To recap, S.B. 72 would make multiple key changes to Ohio law, including eliminating the requirement that political subdivisions (i.e., cities and other public entities) pay prevailing wages on “public improvements.” For a full discussion of the bill itself, see our March 2017 blog post.
Senator Huffman provided testimony on the bill, explaining its aims and proposed benefits to Ohio public projects. Huffman testified that S.B. 72 “would make participation in prevailing wage guidelines permissive, rather than required, for local governments, institutions of higher education, and mental health and specialty districts.” By allowing political subdivisions to selectively apply the Ohio prevailing wage, “smaller, rural districts” that lack the large tax base of major cities can avoid the cost barriers that the prevailing wage imposes, many times “up to 10-20% more than the [local] market rate,” according to Huffman. Huffman also testified that “many bigger cities will agree to pay the mandated wage,” but other, smaller governments are “unable to pay a higher wage,” and are “in many cases not moving projects forward due to increased costs….” Huffman believes that S.B. 72 will allow these smaller political subdivisions to move forward with needed public projects.
S.B. 72 would also relieve local governments from the extensive documentation process needed to comply with the prevailing wage law, which Huffman called “a significant burden.” Huffman further testified, “many contractors do not even want to bid a job if it is a mandated wage project due to the heavy paperwork necessary from their end.”
The Committee will continue to consider S.B. 72, and make any changes the Committee believes necessary before potentially sending the bill to the floor of the State Senate for a vote. Vorysonlabor.com will keep you updated on the status of S.B. 72, and whether action is taken prior to the end of the “lame duck” session in the state legislature.